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Our Bureau

Seeks PM's intervention in the issue

New Delhi June 22 Expressing concern over allowing a private company to fix the price of natural gas, the trade union outfit of CPI (M) has sought the Prime Minister's intervention on the issue.

It also asked the Government to benchmark the administrative gas price for the power and fertiliser sectors.

The Mukesh Ambani-led Reliance Industries Ltd (RIL) has been in news for its proposed pricing formula for its Krishna Godavari Basin gas to the Petroleum Ministry.

The Centre of Indian Trade Union (CITU) has observed that private companies, which are awarded gas fields for exploration under the New Exploration Licensing Policy (NELP), are bound by the production sharing contract(PSC).

As per the PSC, the Government can fix the price of the gas sold to the Government and its nominees, CITU said. "The Government can formulate its policy before permitting gas sales with the objective to develop its resources in the efficient manner," it said.

A private contractor has no business to fix the gas price for the power and fertiliser PSUs, which are government nominees, it said. CITU also alleged that the Petroleum Ministry is ignoring the clause in the PSU, which empowers the Government to fix the price.

Cost impact

The trade union has further argued that giving a free hand to fix the price of the KG Basin gas would have a direct bearing on the cost of fertiliser and power.

"Taking advantage of the present gas shortage scenario, it is reportedly benchmarking the gas price to about $5 per million British thermal unit as against the prevailing administrative price of $2 approximately, supplied to 85 per cent of the customers by ONGC/OIL," it said.

CITU added that such a hike of gas price, if approved, will be passed on to the common man by the power industry, and to the Government exchequer by the fertiliser industry through an increase in quantum of subsidy to annul the increase in the production cost of power and fertiliser.

CITU, however, refrained from naming the private player.

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